Sensex rallies 790 pts despite rupee woes, elevated crude prices

Despite Brent crude prices hovering around the $106/barrel mark, and rupee hitting a new low at nearly 96-to-the-dollar, Dalal Street witnessed a strong rebound on Thursday. After an early slide, sensex rallied through the session to close 790 points up at 75,399 points as HDFC Bank, Bharti Airtel, and ICICI Bank boosted the index. The 1.1% jump in the index came despite a marginal Rs 187-crore net buying by foreign funds.

According to Vinod Nair, head of research, Geojit Investments, the domestic market staged a counterintuitive recovery from intraday lows and ended higher despite the rupee hitting a record low and crude remaining elevated. “Investor confidence was bolstered in anticipation of potential govt measures to mitigate (rupee) weakness, including consideration of bond tax relief for foreign investors and potential tightening of the Liberalized Remittance Scheme to stem capital outflows.”

“Investor sentiment was further anchored by positive cues from the summit between US President Donald Trump and his Chinese counterpart Xi Jinping, which raised hopes of expanding economic cooperation,” Nair added.

The day’s rally added about Rs 4.5 lakh crore to investors’ wealth with BSE’s market cap now at Rs 462.9 lakh crore, official data showed. On the sectoral front, telecom, healthcare, and metal stocks rallied while IT stocks came in for strong selling. “Going forward persistent foreign outflows, elevated crude oil prices and the rupee slipping to fresh record lows continue to pose key macro risks for the domestic market,” said Siddhartha Khemka, head of research—wealth management, Motilal Oswal Financial Services.
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